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Term Two Triumphalism Faces Challenge as GDP Shrinks, Middle East Burns

The news this morning is not the kind a White House likes as it rolls up its sleeves to begin a second term.

First comes the dismal headline economic report. “Real gross domestic product—the output of goods and services produced by labor and property located in the United States—decreased at an annual rate of 0.1 percent in the fourth quarter of 2012,” the Department of Commerce said in a press release this morning.

That’s a small number, and likely to be revised later, but a minus sign in front of GDP is not what you want to see. One more of these and we’ve got an official “double-dip” recession, a poisonous opening to what, if the economy fails to perform, could be a very difficult second term.

Then there’s the Middle East. As the Egyptian crises deepens, there are ominous reports of possible Israeli attacks in Syria. According to numerous reports Israeli aircraft flew into Lebanese airspace yesterday and attacked a convoy of vehicles on the border with Syria. Four unnamed sources in the Israeli and American governments confirmed the attack to Reuters. “There was definitely a hit in the border area … something has happened,” said one source.

The news is still uncertain with no government officials openly confirming the story, but the background is ominous. Israel has grown increasingly concerned about Syria’s reportedly vast stock of chemical weapons. In the chaos of the Syrian civil war, these and high-tech heavy weapons could fall into the hands of Hezbollah, which is allied with the embattled Syrian regime.

Recovery at home and peace abroad were the President’s top claims in last year’s campaign. Right now the press, guided by its usual mix of group think and blue model loyalty, is high on the idea that the White House is sitting in the cat-bird’s seat. The Republicans are in disarray, the “national conversation” is shifting to the left on subjects like gun control, and it is morning in America for the left.

Maybe. And the economic news could turn around. As Matt Yglesias points out there is a lot to like in the economic news once you get past that headline number:  “people are consuming more and saving more and businesses are investing more and we’re adding to the housing stock. That’s all good stuff.” The decline may be nothing more than a statistical freak: government spending on defense slipped 22.2 percent, the most in four decades.

But the conventional wisdom of Washington is fickle; it would not take much more bad economic and foreign news to change the mood in DC. The second term has a long way to go, and the President’s legacy is still to be shaped.

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